The SAR government should develop coherent policies to strengthen environmental, social and governance reporting so locally-listed companies can improve the quality of their ESG compliance, the Financial Services Development Council says.
Regulators in developed jurisdictions are taking steps to improve and promote ESG reporting. But the FSDC said Hong Kong stillneeds a more coordinated policy environment to achieve this.
The new reporting standards require company board members of listed companies to engage in strategic thinking regarding ESG compliance. They need to be aware of the importance of ESG reporting and to strengthen the oversight of non-financial reporting in terms of ESG compliance
Stephen Wong,
board member of Financial Services Development Council
The FSDC, which is the government’s high-level advisory body on the Hong Kong financial, services industry, has released a new report on sustainable ESG investment in the city.
Discussing the report on Wednesday, FSDC new business committee member Woo Pat-nie said: “If financial regulators in Hong Kong can put forward some key focus areas then the market can work on these suggestions.
“For example, would Hong Kong regulators want more mainland companies to issue green products in Hong Kong? Or is there any green angle regarding the development of the Guangdong-Hong Kong-Macao Greater Bay Area that can come out?” Woo told reporters. The government has introduced more initiatives to bolster ESG reporting standards to improve Hong Kong’s status as an international financial center.
The Hong Kong Stock Exchange’s new ESG reporting guidelines took effect on July 1. Locally-listed companies are required to undertake ESG reporting based on new guidelines for financial years commencing on or after July 1.
Key changes to these guidelines include shortening ESG report publication deadlines; introducing mandatory disclosure requirements; requiring the disclosure of significant climate-related issues; revising environmental key performance indicators; upgrading disclosure obligations of social KPIs, revising social KPIs; and encouraging independent third-party assurance of ESG reporting.
FSDC board member Stephen Wong said: “The new reporting standards require company board members of listed companies to engage in strategic thinking regarding ESG compliance. They need to be aware of the importance of ESG reporting and to strengthen the oversight of non-financial reporting in terms of ESG compliance.”
It has also suggested the government provide companies with subsides for ESG training courses. This is to address the shortage of ESG talent and to establish an information-sharing platform.
The FSDC published another report the same day on developing family offices in Hong Kong. The report said the city had everything needed to be a family office services hub in Asia. A family office is a private company which handles investment management and wealth management for affluent families.
The FSDC report said: “A more flexible regulatory regime, coupled with a higher degree of clarity on the applicability of potential licensing exemptions from the Securities and Futures Commission, would be beneficial to Hong Kong’s position as an attractive jurisdiction for the establishment of single-family offices and multi-family offices.
“Introducing more competitive tax treatment for family offices to retain and attract ultra high-net-worth families to set up and run their operations in Hong Kong is vital,” the report added.
The FSDC also recommended the government should provide more specific training programs and establish one-stop liaison and service centers to develop family office businesses in the city.
